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How to create the magical alignment you need to win
Behold this magical money-dispensing machine!
Americans know it as a “Slot machine”. In England we call it a “Fruit Machine” (because the pictures were usually grapes, bananas etc) or “one-armed bandit” and apparently, in Scotland they call it a “Puggy” - which I just think is the most wonderful name, so I’m going to steal it.
Maybe you're like me and never play these games, but I'm sure you're aware that to win the jackpot, you need to align the most valuable option perfectly across all wheels.
This is a great analogy for startups or any novel product innovation.
Introducing The “New Product Puggy”
For a new product or startup to catch traction and take off, it needs to find a tight alignment between
A real and meaningful problem
A well-defined customer that understands and values that problem
A product that is known for having an absolute superpower at solving the precise problem the specific customer cares about
This sounds ridiculously obvious, I know. But in practice, I rarely meet an early-stage startup that has this alignment locked down. More often, I see misalignments such as:
They have a product, but customers are using it to solve a different problem to what they expected
They know a problem well, but the customer they are trying to solve it for is not the customer that most values the problem
They might know the problem and customer, but the superpowers of their product are not entirely aligned with the aspect of a solution that their customer most wants. So it feels like a solution to a different problem
This is why many products struggle to catch traction and catch on. Customers don’t quite get it, investors don’t quite believe in it, and users churn.
The whole thing feels a bit “slippy.”
Don’t start pivoting out of control
When you discover that your product, solution and customer are misaligned, you of course need to pivot.
But soon you find another problem. When you pivot and start talking to a different customer, for example, you start hearing about different problems, which require different solutions. It feels like you’ve turned one dial and all the others have changed too.
Pretty soon you find yourself caught in a loop of pivoting and change, and your team starts to question where we are going with all this, and it’s hard to know if you’re making progress.
Is there instead some logical order or process that can be applied here, to bring it under control?
Time To Hit The Hold Button
Let’s go back to our magic puggy and notice that each wheel has a hold button beneath it.
When a seasoned slot machine player sees the symbol they want on one wheel, they press HOLD on that wheel to stick on that selection, then spin the other wheels to try to get them to line up with it. This is a more deliberate path to seeking alignment than randomly spinning all wheels together, and you can do the same for your product.
When you choose which of the problem, solution or customer you want to orientate around, the path to testing and validating the other two aspects becomes a logical process.
So which one should you press hold on first?
This problem is also echoed in the quandary of where to start in positioning strategy. April Dunford recommends starting from “competitive alternatives” before addressing product attributes, customers, and more. Category Design practitioners typically start from the founder’s POV on the problem.
Surely You Should Always Start From The Problem?
Here’s a popular startup adage I don’t necessarily agree with:
“Fall in love with the problem, not the solution”
–Every startup blogger ever
We’ve all heard this a million times, and it is great advice for sure, but that doesn’t make it the right “hold” for everyone.
Satisfy A Market That Satisfies You
This is taking it out of context, but I’ve long been inspired by the thinking behind Justin Wilcox’s definition of product-market fit, which he gives as:
Satisfying a market that satisfies you
What I appreciate, and what many overlook, is that the first priority of a new team should be to build a company and a product that the founders are passionate about.
The typical startup journey is long and brutal, and beset by enormous probability of failure and pain. So no founder should ever go through the pain of building a company that is not the company that they care about.
Contrary to popular opinion, there is no single correct starting point for everyone. However, it is universally imperative for each founder to choose their own path to fulfill their individual ambitions.
Here’s how to do it.
The three logical ways to start
Whether you choose to start with problem, customer or solution depends on which one you are personally most motivated by.
Once you have chosen your start, each path has a logical path to follow…
Problem-Led
Being obsessed with the problem is a popular refrain because it does make a lot of sense.
Being passionate about the problem you solve helps you stay motivated when the going inevitably gets tough, and it helps you stay focussed on features that make a difference to customers, not just features that seem cool.
When starting from the problem, there is a logical order in which to address the other wheels of the New Product Puggy.
Problem (HOLD) Clearly define the problem you promise to solve
Customer Define the customer that most values that problem, and understand exactly how they perceive it
Solution Define and design the solution that will have an absolute superpower in solving the problem in precisely the way the customer will value it
Notice that it does not go Problem > Solution > Customer.
Different customer groups often perceive the same problem differently. Therefore, the customer determines if a solution is "right," not the product in isolation.
You often hear about founders who built a company to solve a problem of their own, and it is great PR to tell the market that you are obsessed with their problem.
But there are other valid paths too…
Customer-Led
The second way-in is when you are passionate about helping or serving a particular type of customer, whatever their problem may be.
Though that sounds contrary to commonly accepted startup wisdom, this is often the norm for many mission-driven founders.
For instance, I was diagnosed with multiple food allergies several years ago. At first, I had a hard time figuring out which items to buy or avoid at the supermarket. I decided what I needed was an iPhone app. The app would store my food allergy profile and allow me to scan food items in the store. It would then tell me if the food was safe for me to eat. I felt if I were to make this, I could help other people like me.
Like most founders, I reflexively started designing and building prototypes of the app, but as a student of the lean startup, I soon remembered to interview other folks with allergies about what they thought of it.
What I heard was that most individuals with food allergies didn’t perceive the grocery store problem to be a significant issue. While most people initially feel disoriented after being diagnosed, they quickly learn to adapt. For those with food allergies, buying food from a store is typically less problematic than finding a suitable restaurant.
This left me with a choice - do I:
A) find a different audience that wants a mobile barcode scanner to help them choose food at a store?
Or,
B) work on something that would better benefit the food allergy community.
I chose B, because I cared more about the people that needed help, than the problem I’d encountered.
A customer-led approach is also popular with mission-driven founders, such as those who are inspired to help segments like war veterans, or minority founders, or an underserved community for example.
In this case, the logical flow to follow is:
Customer (HOLD) Who are you passionate about helping?
Problem What is the problem that they most value?
Solution What is the solution that will perfectly solve the specific problem the customer has?
One word of warning here - check before starting that the audience or segment you define is big enough to have the potential to drive the scale of business you desire. If your ambition is to build a unicorn business, but your audience is not valuable enough to power a business of more than a few million, it won’t satisfy your ambitions.
Solution-Led
Most startup texts deride the notion of being motivated by a solution, rather than a problem.
However, I argue that this is not only acceptable but also the right approach for many businesses. It might even be the most common approach in practice. (Though most wouldn’t admit it publicly)
This is often the experience awaiting folks that join a company after the founding team, or join a product that is already quite mature or difficult to pivot, like hardware. Indeed my last 2 postings as CMO of Topology and Bryte were both this way. The product had already been built and my job was to find customers for it.
Solution-led companies frequently form when a founder has a technical insight or breakthrough. Think university research spin-outs, engineers tinkering with a new technology or a scientist that accidentally creates glue that is not strong enough to rip paper, then needs to find a use for it.
In this case, the logical order in which to lock things down is:
Solution (HOLD) AKA the product or technology you have discovered, or technology you love playing with
Problem That it solves. (There may be many, in which case you should pick the most valuable)
Customer That most values that problem.
Hint: If you are considering any sort of “solopreneurship” business, this may be your path, since your product is YOU, and you can’t really change your skills or experience much in the short term. Better to learn what your superpowers are, define valuable problems you can solve with them and find customers that value that problem.
Choose your adventure wisely
The New Product Puggy technique is the second step in my “Lean Category Design” process, which is the foundation of Traction Design.
Having now walked many teams through this process, I’ve been surprised to find that many people are confused as to what their primary “HOLD” is. A few times clients have told me they were most passionate about a problem, for example, when I can clearly hear from our exploration of their vision, mission and purpose (step 1) that they are really passionate about a customer.
Just realizing this point alone can be a massive unlock.
So try this exercise for yourself now, and if you are not sure, ask a friend to challenge your thinking. You can also book a short free with me to get a second opinion. Subscribe now for free and get a link to my free subscriber office hours in the confirmation email.
I hope this article is helps you get started towards building a company that satisfies your ambitions.
If you found it valuable or even just mildly interesting, please help others discover it by pressing like and restack. 🙏